Telia moves into Swedish TV with €887m deal to buy broadcaster
Telia Company has announced its second major acquisition in a week, by agreeing to buy the company that owns Swedish independent TV channel TV4 for €887 million.
The move comes just three days after Telia said it would buy TDC’s Norwegian business for €2.2 billion, including a mobile network and its GET-branded TV service, which serves 518,000 households and businesses on a fibre network.
Now, taking its spending for the week up to €3 billion, Telia will buy Bonnier Broadcasting from its privately held parent company for 9.2 billion Swedish kronor.
The Bonnier group owns magazine and book publishers in Sweden, Finland, Germany and the US, among other countries, but has now offloaded its broadcasting side to Telia, including channels in Sweden and Finland.
TV4 is Sweden’s biggest commercial broadcaster, rivalling the public-sector operation SVT. Bonnier Broadcasting also owns MTV3, the biggest commercial television channel in Finland – unrelated to the US-owned music channel MTV.
Johan Dennelind, president and CEO of Telia, said: “The acquisition is a natural next step to complement Telia Company’s core business, where our millions of customers give us a very strong position in the market. Together with TV4 we will serve customers and viewers in new ways and create new business opportunities. We have great respect for our new role as a media owner and have a clear view of how we will maintain the editorial integrity of the business going forward.”
That last sentence is designed to address a number of sensitivities. The Swedish government owns 37% of Telia and the state owns 100% of SVT.
Georgi Ganev, CEO at rival telecoms and media group Kinnevik, told Reuters this morning: “As a citizen I think it is strange that the state can control both public service and, if the deal goes through, the biggest commercial TV channel.” Kinnevik is a major shareholder in Swedish cable company Com Hem, European mobile operator Tele2 and African/Latin American mobile operator Millicom.
Telia said it will establish a new business area, where both Telia’s existing TV business and the Bonnier Broadcasting businesses will be included. It said the intention is that Casten Almqvist, who is currently CEO of Bonnier Broadcasting, will become CEO of that business area.
Almqvist said: “This deal represents a further strengthening of Bonnier Broadcasting’s existing strategy, and it is logical when looking at the changes in a global and highly competitive media market.”
He said: “With Telia as owner, we create even better conditions for our commitment to high-quality Swedish content ranging from news and sports to drama and entertainment. With Telia’s position in technology and distribution, we get together new opportunities to reach our programmes and services to large groups of users in Sweden and Finland.”
Tomas Franzén, president and CEO of the Bonnier group, said: “Telia Company, with its leading mobile networks and technical capabilities, will be an excellent owner and develop these businesses further.”
Telia said it expected to take until the second half of 2019 to get the deal through regulators. It is expected that Swedish, Finnish and European competition authorities are likely to be involved – unlike this week’s Norwegian deal, which Telia expects to get though regulators by the end of this year.
Dennelind said of the two deals: “Both transactions are highly aligned with our strategy. The first [TDC Norway] makes us the obvious challenger on the Norwegian market with a truly converged mobile, TV and broadband customer offering as well as an enhanced B2B operation. We allocate capital to an attractive market where we acquire a best in class asset.”
He continued: “The second combines the Bonnier Broadcasting’s competence and portfolio within local content and our superior digital TV service and first-class networks, creating a unique converged offering to consumers.”